Barry Callebaut – Full-Year Results, Fiscal Year 2011/12: Accelerated Sales
Sales revenue increased 11.5% in local currencies to CHF 4,829.5 million. In order to support current and future growth, Barry Callebaut invested significantly in structures, factory expansions, the Gourmet business, ramp-ups related to strategic partnership agreements, and “Sustainable Cocoa”.
7 Nov 2012 --- In its past fiscal year 2011/12 ended August 31, 2012, Barry Callebaut AG, the world’s leading manufacturer of high-quality cocoa and chocolate products, accelerated its growth pace and achieved strong volume growth in all Regions. Sales volume grew by 8.7% to 1,378,856 tonnes. All Product Groups contributed to this growth. Barry Callebaut’s growth was significantly higher than the global chocolate market growth3. It was driven by the company’s core business, the Food Manufacturers Products business, including long-term partnership agreements. Specialties products and emerging markets also supported growth. Barry Callebaut’s Gourmet business considerably outpaced the respective local market growth.
Sales revenue increased 11.5% in local currencies to CHF 4,829.5 million. In order to support current and future growth, Barry Callebaut invested significantly in structures, factory expansions, the Gourmet business, ramp-ups related to strategic partnership agreements, and “Sustainable Cocoa”. An accelerated demand as well as capacity constraints in some areas resulted in higher operating and supply chain costs. All these factors affected the company’s operating profit (EBIT): EBIT increased 1.0% in local currencies to CHF 353.2 million. A lower EBIT (in CHF), higher financing costs as well as a less favorable tax mix led to a decrease in net profit from continuing operations to CHF 241.1 million. Net profit for the year including discontinued operations amounted to CHF 142.6 million, compared to CHF 176.8 million in prior year.
Outlook – Positive on company’s performance despite challenging environment
“Despite the current, rather difficult economic environment, especially in Western Europe, we remain positive on delivering on our strategy and reaching our targets. Therefore, we have renewed our mid-term guidance of on average 6-8% growth in volume and EBIT until 2014/154,” said Juergen Steinemann on the outlook. “Our main priority for the next fiscal year is to finalize the various investments in capacities and structures. This will create a sound basis for profitable growth. Other priorities are managing our continued growth through long-term partnerships, Gourmet and emerging markets as well as further increasing our operational efficiency with project “Spring” in Western Europe. We also aim to bring additional innovations to the market and further invest in our sustainability initiative “Cocoa Horizons.”
Strategic developments / Highlights along the four strategic pillars
Expansion
Barry Callebaut recently signed long-term agreements with Unilever, Grupo Bimbo (Mexico), Morinaga (Japan) and Arcor (Chile). The company entered into a joint venture with P.T. Comextra to build a new cocoa processing plant in Indonesia. Through capacity expansions at existing factories and the addition of new factories, Barry Callebaut significantly expanded its manufacturing footprint. To further develop its geographic presence in emerging markets, Barry Callebaut announced the construction of a new factory in Turkey last month. Supporting the acceleration of its Gourmet business, the company also acquired Spanish la Morella nuts and the American decorations company Mona Lisa Food Products, Inc. Focusing on business-to-business activities, Barry Callebaut announced its intention to sell its last remaining consumer chocolate factory in Dijon (France) to Chocolaterie de Bourgogne.
Innovation
Barry Callebaut was the first company to receive a positive Scientific Opinion from the European Food Safety Authority (EFSA) on a health claim on cocoa flavanols in July. The company was able to provide evidence that the intake of a defined amount of cocoa flavanols positively influences blood circulation in the human body. In addition, Barry Callebaut also received awards for two of its recent innovations, the Terra Cacao™ chocolate based on the company’s patented Controlled Fermentation method, as well as for a special chocolate for a new Magnum® ice cream.
Cost Leadership
Overall manufacturing costs per tonne of activity decreased on a like-for-like basis by 3% (target: -2%). Strong volume growth supported by technology and process improvements increased both capacity utilization for liquid chocolate and the cocoa processing capacity utilization rate.
After the sale of the Consumer Products business, Barry Callebaut started a comprehensive reengineering project called “Spring”, mainly focused on Western Europe. The company aims to improve customer service, boost speed-to-market, reduce internal complexities, as well as increase overall efficiency and services to the other Regions.
Sustainable Cocoa
With “Cocoa Horizons”, Barry Callebaut started the most comprehensive sustainability program in its history, based on its long-time commitment in this area. The focus is on direct and effective investments in the early stages of the cocoa supply chain. Over the next 10 years, Barry Callebaut will invest CHF 40 million in the most important origin countries. Last year, the company mainly funded training of cocoa farmers in Good Agricultural Practices (GAP), as well as in preparing them for certification. In addition, Barry Callebaut started to build a Center of Cocoa Excellence in Côte d’Ivoire and conducted more than 500 Farmer Field Schools during the past fiscal year.
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